XenoPort and from XenoPort we have Dr. Ronald Barrett, the Chief Executive Officer. Ronald.

Ronald W. Barrett

Thank you for the invitation to speak today and I would like to remind people that I am going to be making forward-looking statements and for additional information regarding the risks and uncertainties of our business, please consult our SEC filings.

I am going to start by giving a high-level overview of XenoPort. The company was founded in the beginning of 2000 and today it’s a very different company than it was in the years passed with the return of the commercial rights of our lead product Horizant. We are very transitioning and building a commercial company with a set of neurology assets that we are very excited about, our commercial product gabapentin enacarbil, the trade name is Horizant in the U.S. is approved for the treatment of moderate-to-severe primary restless legs syndrome and also for the management of postherpetic neuralgia in adults.

In Japan, trade name is Regnite where it is approved for the treatment of restless legs syndrome and we have a partnership with Astellas for commercialization of Regnite in Japan and five other Asian countries. In addition to that commercial product, we have a very robust pipeline of assets that are primarily in the neurology area, including our arbaclofen placarbil in which we are currently conducting a Phase III specificity study, we expect the results in the second quarter and assuming positive results there we’ll be filing an NDA by year-end.

279 is an L-Dopa drug for the treatment of advanced Parkinson’s disease and that has completed Phase II. And then earlier I said 829 which is a fumaric acid ester compound is in Phase I and multiple indications we’re considering for that indication.

Before I talk about these opportunities individually, I’m going to make a couple of points about the value of these assets. First of all, they are being developed and they are intended to have differentiated profile. In the case of gabapentin enacarbil, we have very unique pharmacokinetics that we think that leads to the benefit of the product and we’re the only non-dopaminergic agent approved for the treatment of restless legs syndrome. For AP, we have the potential for extended duration of efficacy and low side effects for 279, reduced off time compared to L-Dopa and for 829, the opportunity for improved efficacy, tolerability as well as development new indication.

Another distinguishing feature of the asset for the company is the fact that we have novel chemical compositions and so we have issued composition of maritime that have long lives with expires into 2022 to 2029, timeframe is illustrated in the slide. All of these times we would expect to apply for patent illustration leading to extension of exclusivity beyond the current exploration data. And importantly now with the return of the right to Horizant to XenoPort we own all of the rights for all of these assets excluding the Astellas rights in Japan and five other Asian countries.

Now a very big event for us occurred at the end of last year which is in the return of the rights to our most advanced product Horizant in the United States. Starting May 1, we are going to be taking over that, all development, manufacturing and commercialization of Horizant. We had partnered this program with GSK in 2007, the partnership ended in November of last year. The transition from that November date to May 1 in which GSK will continue to commercialize the product, they’ve already transferred the NDA to XenoPort. During that transition period, we are not responsible for losses under the previous joint P&L.

GSK is funding existing ongoing clinical trial looking at our low dose, but finished that at their extent. And also as part of the deal, they provided us with a very large inventory of API, which we will be paying small payments in the future for but this will supply our needs for many years to come.

In addition, GSK purchased $40 million of XenoPort shares as part of the negotiated and termination of the agreement. So how has Horizant done well? One of the reasons why the relationship ended was that we were disappointed with GSK’s performance under the contract. They launched Horizant in July 2011. We expect syndrome and in July 2012 for the management of PHN, currently there are approximately 5,000 prescriptions per month in the U.S. with 60% of those prescriptions being generated by specialists and majority of that being from the neurologist.

The use of Horizant currently is highly concentrated with about 80% of prescriptions coming from approximately 2000 physicians, and 70% of the prescriptions are through commercial clients. The managed care access was little to narrow contracting done but despite that the access is not bad. The commercial lies about 65% of insured lives and unrestricted Tier II or Tier III with by far the majority of that being in Tier III position.

Access to Medicare Part B is limited and an opportunity for us to improve access through contracting. The RLS market has not changed substantially from when we initiated the development of this content, or about five million adults in the U.S. who suffer from moderate to severe RLS. Nearly 60% of those sufferers are aware of the condition that they haven’t received a prescription. That is an opportunity for increased use of therapy in this population. So that 6 million prescriptions for RLS agents in the United States annually with dopamine agonist pramipexole and ropinirole representing 80% to 85% of those prescriptions.

It's very important, but then occurred at the end of last year where in contrast to previous guidelines which recommended dopamine agonist as first-line therapy for all patient, new treatment guidelines have emerged. For instance, the RLS study group recommend that obviously delta lag and arbaclofen placarbil the number of that class should be used as first-line therapy for patients who have sleep disturbance, pain comfort, co-morbid, anxiety or history of impulse control. This is really a key change in terms of the treatment of this disease and Horizant is the only non-doppler agent approved for the treatment of molecule severe RLS.

The American Academy of Sleep Medicine conducted as its level of evidence review that published last year where gabapentin enacarbil the only compound in the class that we’ve given high level of evidence in their ranking of compound for RLS treatment.

So what is XenoPort going to do, when the takeover commercialization in May. We are going to be selling the product using a dedicated specialty sales team. We are using a contract sales organization to do that and maintain flexibility and to be able to get the sales force up and running quickly.

We're going to be targeting neurologists, sleep specialists, pain specialists and potentially high prescribing primary-care physician, and we're defining a set of territories on the order of 40 to 50 territories, which are selected on the basis of high RLS prescribers current Horizant prescribes, potential prescribes for PHN, and managed care access. And we’re going to invest our marketing dollars on those territories in which we’re occupying with sales rep that dedicated to selling Horizant. And through this effort by the end of this year we hope to determine an optimal mix of promotional tools and establish a template for scaling for future promotions and how we scale that commercial effort is going to be dependent on a number of factors.

One, I’m going to talk about in a minute, that we have the results of our Phase III spasticity trial, which is going to report out in the second quarter, that would be a very complimentary product to Horizant in the specialty audience. We are talking to potential partners to gain primary care access and also depending on our ability to improve managed care access that would be another factor in our decision to expand this commercial effort.

In addition to the U.S., as I mentioned earlier, Regnite is being sold by Astellas was approved for the treatment of RLS in January last year. The pricing that was set by the negotiation with the government is favorable ¥197 per day for the approved dose.

One of the unique aspects of the market in Japan is, during the first year of the launch of a new product gabapentin enacarbil is a new product in Japan, the prescriptions are limited to 14 days of duration so patients have to comeback every 14 days. The system is not, RLS patients are not normally seen every 14 days. So as the growth of prescriptions in the first year as was expected has been somewhat subdued, but that restriction comes off in May of this year, where physicians will be free to prescribe any duration of treatment.

Astellas is putting a large effort behind this. They currently have about 1,200 sales reps calling on sleeps and neurology specialists. There are about 2 million or less the amount of severe RLS sufferers in Japan. And we get a high teen royalty on sales of Regnite in Japan. So we are optimistic that we are going to start to see these revenues being generated from Japan in the near future.

I want to now turn to gabapentin enacarbil, which we are developing for the treatment of spasticity. Start by reminding you about what spasticity is. Spasticity occurs due to damage of nerves that results in an abnormal muscle tone and it can also be associated with muscle spasms, sustained contraction and exaggerated reflexes and they consequent to that people have difficulty with movement and in fact their daily function.

There are believed to be about 5 million patients with spasticity in the United States. Spasticity is caused by a number of different injuries to the nervous system including multiple sclerosis, spinal cord injury, stroke, traumatic brain injury and terrible palsy.

Now we are interested in two of these populations, the MS population with spasticity and the spinal cord injury population that’s the indication for what we’re seeking approval. So this is some recent data from last year survey of MF patients asking them, what drugs are they taking for the treatment of symptoms of their MF. And you can see by far baclofen is the most commonly used agents to control symptoms in MF patients.

The issue with baclofen and other oral first-line therapy including tizanidine is the poor tolerability and inability to achieve efficacious drug levels and this is just the market research data that we conducted asking patients or physicians, neurologists and podiatrists about failure rate of first-line oral therapy for the treatment of spasticity. So whether any therapy or whether specifically baclofen about 40% to 45% of patients will fail these agents, and they fail relatively quickly within one month to three months of treatment you know that this patient is not going to have a successful outcome with these agents.

Now what the physicians and patients do if they fail these first-line therapies, the options become not particularly attractive no tox is used for focal spasticity. Obviously there is a very high cost of treatment, with a temporary treatment. You have to have reinjection every three months to six months. Some patients go on, the most severe patients go on to intrathecal baclofen obviously an invasive expensive procedure. Some spasticity patients have surgery to reduce the muscle contractions and increase muscle tone they shared with spasticity obviously that’s an invasive permanent solution. And then sometimes other agents are added on to the baclofen and tizanidine there is no real data that suggest that provides benefit, but that just illustrates the challenge of dealing with patients who fail these first-line therapies. So that’s where we believe arbaclofen placarbil will play an important role.

Why do we believe that? While we conducted a Phase II study in spinal cord injuries patients with spasticity. And here we have some fantastic results this is course of the study three doses and we had a nice dose response measuring that’s called the Ashworth Score which is the measure of muscle tone with two highest doses joint specifically significant improvement.

And importantly, we did this assessment of muscle tone in the morning prior to the morning dose and then six hours later. In this study we dosed AP twice a day. And so you can see on the left-hand side of this graph that we had good efficacy prior to morning dosing. So the duration of efficacy is maintained throughout the entire dosing period. So this is something that the short acting baclofen and to then we cannot achieve and would be something that we would differentiate the product from those agents.

Also importantly, you see the lower incidence of somnolence and dizziness not really different from placebo. And this is fundamentally different from baclofen and tizanidine for instance the pathogen served for baclofen as [normal expedition] rate up to 63% for tizanidine in the 40%range. And so with this profile sustained duration, and good tolerability we went and talk to the FDA about further development, and a result of that was an agreement about how this program would be develop, so this is somewhat unprecedented, the FDA agreed that we could develop this under 505(b)2 development path. Arbaclofen placarbil is a prodrug of the R isomer of baclofen. Baclofen it’s on the market today, is the racemic mixture of R- and S-isomers, and so the agreement to the 505(b)2 pathway means that we can reference the FDA’s previous finding of the safety and efficacy of arbaclofen in the form of racemic baclofen in a day it’s previously approved.

So we have done a full development program, all of the preclinical of their QTc carcinogenicity, Phase I studies, and so on has been completed, and the only thing that remains to be completed prior to filing of an NDA is an ongoing Phase III study in the efficacy of twice a day AT, and multiple sclerosis patient spasticity.

So this study has been an ongoing, and this week we – the last patient, he will be completing the last visit, so we definitely anticipate the results of the study in the second quarter, in addition patients are rolling over into a long-term safety study, and we anticipate having enough safety exposures to be able to file the NDA later this year.

This is the design I would say that we an agreement with the FDA at special protocol assessment on the design. It's a parallel design study with short titration period, and eight weeks of maintenance therapy. And there are co-primary end points, the [ASCO] score, and the patient global impression of improvement, and again as I said we expect a result of this study in the second quarter.

Let me just finish by talking about 829, which has generated a lot of excitement for this product, and for XenoPort. 829 is a molecule in the class called fumaric acid esters, another molecule in this class, dimethyl fumarate is the API and BG-12 or Tecfidera as it’s now known, and obviously the results for BG-12 has been very exciting. And we have been developing and this as I said we’re in Phase I currently I’m going to describe a little more about this program, and why we are so excited about it.

So one other things that was recognized some time ago is that dimethyl fumarate is actually a prodrug, when you administer dimethyl fumarate orally, it is rapidly converted to monomethyl fumarates, and it's to believe that pharmacology product this product BG-12 and another product in Germany called Fumaderm which contains DMF is due to the MMF is the tablet.

What we have been seek to make a different prodrug of MMF, one that would have improved properties, so you see on the top of this slide, we have substituted one of the methyl group of dimethyl fumarate with another chemical substituent that does a couple of things, I'll tell you about what improvements we get in the molecule from a feasible sense and also from the preclinical work that we’ve done. But importantly we’ve generated a novel chemical composition and so we have an issued composition of matter for time for 829.

I don’t need to remind investors that the results that have been seen with BG-12 and relapsing and remitting multiple sclerosis. But I would also remind people that another product Fumaderm that’s sold in Germany, it’s the leading oral psoriasis treatment and has a long history of efficacy and safety as a psoriasis agent.

Now the potential areas we are differentiating the product. The first with pharmacokinetic, the dimethyl fumarate is a fairly and valuable compound and at least from that data that’s been published there seems to be a fair degree of interim patients variability and exposure to MMF. Also the current formulation of dimethyl fumarate in the form of BG-12 is a immediate release type of formulation although it’s enterically coated. And it has an MMF of the short half life in the body. So what happens when you take BG-12 you get an immediate, you get a spike in MMF level in the blood which are short lived. So we may have the ability to modify the pharmacokinetics to extend the duration of exposure.

One other thing that’s notable about dimethyl fumarate is GI side effects. I mean we have data that shows that 829 has reduced GI irritation in at least animal studies. One other things that’s notable about BG-12 and Fumaderm is flushing, and we know that the flushing is likely due to the MMF that’s released to the body and in our first Phase I study that I will tell you that we have less flushing due to the different PK profile trial that we were able to produce with one of our formulations.

And as I mentioned earlier we have a composition in a matter of time that protects the product until at least 2029. One of the aspects of BG-12 is that it’s protected by US patent, the formulation patents, and which will be difficult to develop that product for other indications, and we don't have that restriction. We can develop our molecule for any indication, because we have the composition no matter exclusivity protection.

Now, I've mentioned we've conducted a number of preclinical studies and most of these studies we’ve done head-to-head comparison to dimethyl fumarate. So just to summarize some of the studies 829 is considerably most soluble than dimethyl fumarate that potentially leads to easier availability to formulate and more rapid transit of the molecule from the intestinal movements into the bloodstream limiting the climate exposure of the compound to the GI (inaudible). In cell-based measures of permeability, 829 is equally in some cases more permeable than dimethyl fumarate.

One of the things that’s known about dimethyl fumarate is it causes allergic skin reaction, it's a contact sensitizer, so we did an animal study and showed that 829does not have the same context sensitization as dimethyl fumarate. We’ve conducted GLP 28-day tox studies to date in those studies, we saw less gas with irritation for dosing oral solutions of 829 and nothing compared to DMF.

We’re going to be presenting the results of these studies at the AAM meeting in a couple of weeks. And also in that poster will be information with regard to a study in which we look at radiolabeled 829 compared to the radiolabeled DMF and show that in contrast to DMF, 24 hours after dosing there is no localized radio activity within the GI issue suggesting that 829 is able to penetrate this permeable and gets into the systemic circulation without forming corpulent addicts with tissues in the GI track.

And we've also shown and this is an important question that 829 is effective in EAI models of MF and also a model that used kind of particularly good model, but its used to look at agents that have potential for psoriasis and 829 is at least as effective. In some cases, that equivalent dose is more effective than DMF in these model suggesting again that it’s the MMF that is the responsible for the biology of the compound.

I mentioned that we've completed a first in human study results with growth in press release on October. For the full results of this study, we will be disclosed at AAM in a couple of weeks. This was the study to look at four different formulations of 829. And there is crossover study in each formulation is tested both fed and fasted; typical first at human study. And so the results of this, we were able to confirm the metabolism of 829, so we have rapid cleavage conversion to MMF, with no detectable intact prodrug or the inappropriately metabolized prodrug, and the prodrug, as the [pyrimidine] and novelties that’s attached to MMF, was the clear rapidly with a half-life of about three hours.

Formulation 1 was designed to mimic BG-12 produce a sharp peak in high Cmax. It’s did that and that profile could support two or three times a day dosing. We saw the 12 subjects that received that formulation 7, experienced flushing. That’s in contrast to formulation 2, which was a flatter profile, same AUC, but a more blunted Cmax. And in those 12 subjects that received formulation 2; only one subject to experience flushing. And otherwise 829 was well tolerated during the study. So another noteworthy thing about formulation 2 is that there was no impact of food on the MMF exposure. And so that could be another advantage of that particular formulation.

So where are we today? We are conducting two Phase I studies additional Phase I studies. The first is a multiple ascending dose study for testing both formulations, formulation 1 and formulation 2. There is short titration, and then the compound is dosed for seven days. At the end of seven days, we look at the pharmacokinetics and we started that study in December. We expect the results of that study in probably mid year. Actually this week, we dosed for subjects in another study which is radio labeled 829 metabolism and disposition study. The objectives of this study is to establish that there are no unique metabolites in human that are not in animals so that we can convince regulatory authorities that no additional tox work needs to be done, other than the tox work that we’re already conducing in dosing 829. We expect the results of that study by mid-year.

So just to finish up, in terms of cash balance we haven’t reported our fourth quarter, yet we reduced on a couple of weeks. We ended the third quarter with $130 million is cash and cash equivalents. We added $40 million as part of the GSK agreement. We have about 42 million shares plus the added four million shares of GSK, and we have no debt.

So just then to summarize the events that are coming up we’re really excited about the assets of the company, we have these four neurology assets. We’re going to be reintroducing Horizant into the U.S. market starting May. We’re looking forward to see the performance of the product in our hands. We’re going to be getting the results of our Phase III study in specificity in the second quarter. I didn’t talk today about 279, which is completed Phase II. We are going to be having some regulatory interactions to define the Phase III program for that program. And then as I mentioned, the Phase I results we expect the outcome of those two studies I described by mid year. So therefore sort of blossoms for this year and we look forward to reporting them as the result come out.

And I thank you for your attention. Thank you.

Question-and-Answer Session

[No Q&A session for this event]

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